Esso Australia Resources Ltd v Federal Commissioner of Taxation, also known as 'Esso' is a decision of the High Court of Australia.
At issue was a claim of legal professional privilege by the oil and gas conglomerate Esso, in respect of over 500 documents. The documents were subject of a discovery order by the Commissioner of Taxation during a proceeding by the company against a set of amended income tax assessments.
The case is notable as an authority for the test of legal professional privilege in Australian common law. It established the 'dominant purpose' test as the applicable test, overruling the 'sole purpose' test from Grant v Downs. This unified Australia's common law test with those established by prominent Evidence law statutes; particularly the Evidence Acts belonging to the Commonwealth and NSW. It also algined Australia's test with that of other common law jurisdictions such as that of New Zealand and the United Kingdom.
Prior to Esso, differing tests at common law and statute caused complications for Australian judges and legal practitioners. For example, differing tests applied between privilege in the adduction of evidence, and privilege in pre-trial proceedings.
Facts
In 1996 Esso commenced proceedings in the Federal Court, appealing against amended income tax assessments. Orders for discovery were made, and privilege was claimed in respect of 577 documents. After discussion between the parties, it was agreed that some of the documents qualified for protection under the sole purpose test; whereas others would only be protected by the dominant purpose test.
At first instance, Foster J held that the correct test that applied to the discovered documents was the 'sole purpose' test in Grant v Downs; rather than the 'dominant purpose' test as set out in ss118 and 119 of the Evidence Act 1999 (Cth).
Foster J's finding was upheld by the Full Federal Court by Black CJ, Sundberg and Finkelstein JJ. Beaumont and Merkel JJ dissented.
Esso then appealed to the High Court. One of their arguments was that the court should declare that at common law, the dominant purpose test applies to legal professional privilege.
Judgement
Majority
Gleeson CJ, Gaudron and Gummow JJ
The plurality judgement discussed at length the history of common law development sometimes having origins 'in statute, or as glosses on statute, or as responses to statute'. Nevertheless, they declined to develop the common law test in this way. Instead, they decided to accept the appellant's invitation to reconsider Grant v Downs.
The plurality rationalized the majority judgement in Grant v Downs as compatible with the dominant purpose test. Barwick CJ's view in that case, previously referred to as a dissent, was recharacterised by the court in Esso as a concurrence. The court noted a passage from Barwick in that case which had 'proven influential in other jurisdictions'.
Barwick had written:'The Court should state the relevant principle as follows: a document which was produced or brought into existence either with the dominant purpose of its author, or of the person or authority under whose direction, whether particular or general, it was produced or brought into existence, of using it or its contents in order to obtain legal advice or to conduct or aid in the conduct of litigation, at the time of its production in reasonable prospect, should be privileged and excluded from inspection.'They acknowledged that the Grant sole purpose test had been followed in Australia for 20 years. They then decided to evaluate whether to reconsider the reasoning of the majority. This evaluation was undertaken with reference to Commonwealth v Hospital Contribution Fund, a case concerning principles relating applying to the High Court's reconsideration of its own opinions.
The court then characterised the sole purpose test enunciated by Stephen, Mason and Murphy JJ in Grant as unprincipled. The plurality then claimed that their reasons did not require a preference for the sole purpose test over the dominant purpose test.